Data provided by non-life insurance companies who participate in the Insurance Data System (IDS) of the South African Insurance Association (SAIA) show that insurance claims for storm, lightning, hail and wind damage due to extreme weather events in November came to about R35-million for a total of 9 392 separate claims.
The rand amount was evenly split between claims under motor policies and claims under house owners and household policies.
The claims information for two weeks after the November storms is drawn from data submitted by insurance companies which participate in the IDS. It therefore does not provide a comprehensive view of storm-related insurance claims made subsequently.
IDS data shows 5 714 storm-related motor claims in the initial period after the November storms. Of these, 5 212 were for hail damage, 373 for general storm damage and 129 claims for windscreens.
Hail damage motor claims came to R15.5-million, with R2.3-million for storm damage and just R12 151 for windscreens. Total motor claims due to the November storms were R17.8-million.
There were 3 678 claims for storm damage under home owners and household polices. The number of lightning claims was the highest at 1 340, with 1 146 for hail damage, 1 080 for storm damage and 112 for wind damage.
Claims paid for home owners and household policies came to R17.3-million. Hail claims came to R8-million, lightning claims paid were R3.6-million, storm damage claims paid came to R5.5-million, with wind-related claims coming in at R245 435.
Pamela Ramagaga, General Manager: Insurance Risks at SAIA, says that the claims paid for damage caused by the November storms are comfortably within the industry’s ability to receive, assess and settle claims quickly.
“To put these storm claims into context, it is worth noting that Prudential Authority figures show that the sector paid R68.3-billion in claims in 2022 and some R95-billion the previous year.
“However, the non-life insurance sector remains concerned about the impact of extreme weather events as a result of climate change. Globally, reinsurers – the insurers to the insurers – are re-pricing weather-related risks.
“Unfortunately, re-pricing is reflected in the cost of insurance to the policyholder, demonstrating at a practical level the rising impact of climate change on businesses and consumers,” Ramagaga said.
She says that the insurance industry continues to expand initiatives and programmes aimed at helping policyholders reduce and mitigate risk.
“We appreciate that it is not sustainable only to adjust premiums and exclusions. The best way to contain insurance costs is to invest now in steps that avoid or limit the damage that could be caused by extreme weather,” Ramagaga added.
SAIA is also currently in conversation with National Treasury to see if collaboratively the industry and government can find a way of bridging South Africa’s protection gap, especially against natural catastrophes and disasters. The non-life insurance protection gap is the difference between optimal insurance coverage and actual coverage. In other words, the protection gap describes the difference between the sum insured for and the actual full potential losses.
“With National Treasury we are looking especially at systemic risks such as floods, natural catastrophes, grid failure, water failure and major cyber-attacks that the insurance industry cannot absorb. This includes climate-related risks. The conversation is still in its early stages, but we are optimistic that sound national responses to systemic risks can be developed,” Ramagaga said.